Uphill battle for UK biotechs
IT HAS been a tough two years for the UK’s biotech sector. After a period of digging deep into its reserves of stamina and nerve, will a stronger, fitter industry emerge ready to take on the increasingly fierce global competition?
The race to develop new drugs continues to hot up. The goal is a new treatment for one of the scores of medical conditions that so far lack any drug therapy, and companies continue to invest massive sums in the search. But even after the 10 to 15-year journey from discovery to licensing, there is no guarantee of success. Failure rates are high, and failure can be fatal for aspiring companies.
These high risks, however, are matched by potentially massive rewards, and on the face of it the UK has a good position in the race. Its biotech sector is second only to the US and is the most mature in Europe. The UK is home to some 280 private and 48 public biotech companies, generating annual revenues in the region of 拢2 billion. These companies spend more than 拢500 million on R&D annually and employ around 23,000 people 鈥� but only seven are profitable.
As large as these sums are, they are dwarfed by the biotech sector in the US, which generated revenues of more than $30 billion in 2002, employing around six times as many people as the UK sector and spending about $16 billion on R&D. The global leader, California-based Amgen, is worth over $82 billion 鈥� considerably more than the entire European public biotech sector. The largest UK biotech, Slough-based Celltech, is a minnow by comparison, valued at around 拢1.1 million (about $2 billion), and is still some years away from launching its first in-house biotech product.
Now more than ever, the focus is on products rather than promises, and here the UK has great potential. More than 200 products from public companies are undergoing clinical trials, and about 80 of these are in phase II testing or beyond. This is encouraging, but there are concerns that a high proportion of them are “orphan drugs” 鈥� those that target conditions affecting fewer than 5 people in 10,000. Their correspondingly small sales potential is not enough to attract investors away from the US, where potential blockbusters exist.
The gulf in punching power between the US and the UK shows the massive challenges ahead, not only for fledgling university spin-offs but also for the larger biotech companies. But it is not simply a case of the UK versus the US. Each company and research lab is fighting its corner in a global arena, and many countries strenuously promote their bioscience industries. Some are given a better start than others, and strong investment is key.
While the UK biotechnology industry averaged more than $200 million of annual venture capital investment over the last few years, many companies have been struggling to survive against the backdrop of risk-averse investors who got their fingers frostbitten in the post-2000 market freeze.
But last year saw a new lifeline for some companies. In August, venture capital investors Abingworth Management launched a $350 million fund to invest in biotech and medical companies. But cash is still hard to come by, and biotech CEOs are spending more time on the road chasing their next funding round. With the average deal currently taking almost two years, by the time they have raised the cash, they need to be planning their next funding tour.
Their US counterparts have an easier task. Investors in the US have been around the block a few more times and have a more forgiving attitude towards the difficulties encountered in the industry (New 杏吧原创, 24 January, p 50). Strong share prices and easier roads to raising capital have put US companies in a good position to hunt for bargain European companies.
So the fate of many British firms may well be acquisition by a US rival. Last year the profitable vaccine player Powderject was acquired by US giant Chiron; and Amersham, the UK’s largest healthcare company, was bought by General Electric of the US in a $9.5 billion deal 鈥� the biggest healthcare merger since GlaxoSmithKline formed in 1999. Towards the end of the year there were rumours that Swiss heavyweight Serono was to make a move for Celltech following Serono’s $460 million bond issue. This was compounded by rumours that Serono might itself be swallowed up by a big US player.
The action is continuing this year. Last month Oxoid, the culture media and diagnostics company in Basingstoke, UK, was acquired by Fisher Scientific, based in New Hampshire. In the same month, Cambridge-based vaccine company Acambis 鈥� one of the UK’s few profitable biotechs 鈥� announced that it was closing its UK research set-up and transferring it to the US.
Despite the recent gloom, the UK sector still has much to shout about, as investors continue to back the most promising companies. UK firms attracted some of the largest European venture capital funding rounds last year, including immunology player Lorantis in Cambridge ($42 million); London-based anti-infective company Arrow Therapeutics ($34 million); Dundee-based cancer specialist Cyclacel ($34 million); and reproductive health company Ardana Bioscience, in Edinburgh ($32 million).
Among the publicly quoted UK biotech companies Oxford BioMedica, specialising in oncology and neurology drug discovery, raised $35 million in September 2003. And one of the most promising UK companies, Cambridge-based Alizyme, which focuses on treatments for obesity-related diseases, raised $19.2 million through a share issue in October. Slough-based Xenova raised $36 million in November, allowing the company to finance phase III trials of its most advanced drug TransMID, a modified diphtheria toxin to treat a type of brain tumour. Oncology player Antisoma, in London, hit the headlines late in 2002 on the back of a high-profile alliance with Swiss-based Roche, and has looked good ever since, raising $26 million in 2003 despite a relatively good cash position.
The UK government, recognising the importance of the biotech sector to the economy, has investigated the issues facing the sector. A recent report from its biotechnology innovation and growth team recommends a raft of measures to support the industry, from ways to speed up the approval of new drugs to legislation aimed at curtailing the activities of animal rights extremists.
In the long-distance race of drug development the US is out in front and fast increasing its lead from the second-placed UK. Support by the British government will go some way to closing the gap, but bold moves by CEOs and investors will be needed for the UK to stay in the running.
Spam mystery
Spam now occupies 80 per cent of my incoming email traffic, clogging up my telephone lines, my ISP and the internet (7 February, p 26). Friends report being invaded by ever-increasing numbers of promises of fatter lips, longer penises, larger breasts, other odd products, loans and money-making offers. Yet nobody ever admits to buying any of them, nor indeed even opening the offending emails.
For two weeks I opened all spam 鈥� more than 200 adverts, most of them repeats 鈥� and copied it all to my ISP. They promised to track down every abuse and punish the spammers severely 鈥� but in total secrecy, because the ISP is not allowed (by whom?) to report back to me.
I also tried to order the products. None of the offers was real. None of the adverts carried web or email or postal addresses that worked. None had a mechanism to relieve me of money. None are actually trying to sell anything.
So what is the game? Who benefits from these utterly useless communications?
Stop that car
James Randerson’s article about remote immobilisers for foiling car thieves missed the obvious solution (21 February, p 24).
All modern cars have a computer-controlled rev limiter that changes the ignition mapping when the engine revs get too high. All that has to be done is to add a control that will limit power and set a top speed of 40 kilometres an hour, say, when a specific signal is sent to the car. Even the police should then be able to keep up with the car and stop it.
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This concept has been tried and tested in Melbourne during a vehicle theft, without any problems. All that was required was communication between the police and the security company to guarantee the car was stopped in a safe place.
Emailers don't lie
I was intrigued by the article about how people lie more in phone conversations than in emails (14 February, p 23) as I have found a similar difference between phones and email in my business.
I am a prostitute, and to get clients I advertise in the local newspaper. Normal practice is to provide a phone number as an initial point of contact. Using my cellphone was getting rather expensive, as was advertising several days a week. I also work as a volunteer for several non-profit community organisations, and there I found many people preferred emails to the phone or postal services. So I decided to try an email address instead.
The difference really surprised me. With my phone number, guys would sometimes make bookings then not turn up. Others sounded very creepy. However, using email I have had only two cancellations, and in both cases I was paid in full for the time they booked with me.
Eco-fares
I was interested to read your article (21 February, p 23) about a machine to produce hydrogen from alcohol and water, to power eco-friendly bus services.
While on holiday in Tenerife, I read the following in the English language magazine Canary Island Connections: “Spain intends to destroy 7.6 million hectolitres of wine produced in the country to regulate the industry. The wine will be burnt to produce alcohol that will be used for other uses. It is hoped that this measure will rescue the wine market which is currently said to be reaching saturation point.”
The obvious conclusion is that prospective passengers on eco-friendly buses should offer a bottle of cheap wine to the driver in lieu of their fare.
Chinese dog
Your article on the warrah (20 December, p 80) mentioned a theory that it may have been carried from South America, but “unfortunately, there is no evidence that people鈥ven visited the Falklands before the English.”
I have come across an intriguing alternative theory as to how such a large predator may have got to the remote Falklands. In his book 1421: The year China discovered the world, Gavin Menzies suggests that a Chinese fleet of ocean-going junks may have visited the Falklands in around 1423. Indeed, he specifically mentions that the warrah may have been descended from the dogs carried on board the fleet for food and hunting.
A Chinese fleet in the Falklands sounds implausible, but the arguments in the book make it seem at least possible.
For the record
鈥� In the article “‘杏吧原创s not to blame’ for arsenic error” (28 February, p 4), we reported the British High Court’s dismissal of legal claims brought by Bangledeshi villagers against the British Geological Survey. The article stated that the BGS and its scientists made mistakes in their 1992 report which delayed the discovery of naturally occurring arsenic in drinking water and cost the lives of many villagers.
We now accept that no mistake was made. The BGS was not instructed to test for arsenic in the water and had no reason to believe that arsenic might be present. Nor did the BGS mistakenly pronounce the well water “safe” for drinking. We apologise to the BGS and its scientists for any distress caused by the article.
鈥� In the article “Hush hour on the highway” (21 February, p 26) we wrongly stated that the Swedish Road and Transport Research Institute is part of Chalmers University of Technology. Also, the European Commission introduced the noise directive in 2001, not 2007, and Ulf Sandberg’s research into quiet tyres is sponsored by the Swedish Agency for Innovation Systems (VINNOVA), not by an international consortium of universities and companies.
鈥� David L. Chandler’s comment on Brian Wall’s letter (6 March, p 33) wrongly gave Hubble’s inclinaton as 22.5 degrees instead of 28.5.
Lose-lose situation
The example of neem that is mentioned in your item on patenting native medicines poses some interesting wider dilemmas (28 February, p 15).
While it is true that the pesticidal effects of neem oil have been exploited in India and elsewhere for perhaps 2000 years, the discovery of the active ingredients, especially azadirachtin, is relatively recent. However, to introduce even natural pesticides in the west (including those with thousands of years of use elsewhere) requires data on efficacy, toxicology and environmental impact far beyond what is required where they have been used historically.
Who is going to pay for this if no protection and commercial return is possible? The answer, it seems, is no one. Neem oil has just been removed from the EU list of “Actives under Consideration” (Official Journal of the European Union L, No. 307, 24 November 2003) because no one is prepared to support it.
So who wins in this situation? Not the neem growers in India, whose crop isn’t going to be approved for use. And not the general public, who could have had a natural and non-toxic insect antifeedant with dramatic effects against, for example, head lice. So we will just have to carry on using those expensive patent-protected synthetics 鈥� which answers your article’s question about who will profit.
Heat and power
Combined Heat and Power (CHP) or co-generation is efficient (14 February, p 24), but only if the heat generated reduces total fuel consumption.
However, if one extends the periods when domestic hot water is available to generate electricity, the efficiency falls dramatically.
After a decade of CHP sales to commercial users the medium-scale market contracted. Some hotels found that oversized CHP increases electricity consumption in summer. The plant provides heat that is not needed and then consumes the electricity it has generated in chillers to rid the buildings of the unwanted heat.
The efficiency of domestic-sized plants (microCHP) is not 85 per cent. It can in fact be negative.
Miracle pill?
In his article on the benefits of aspirin (7 February, p 36), Gareth Morgan makes a plausible case for considering salicylate as a micronutrient with vitamin status, and therefore as an essential component of diet.
On existing evidence, however, it is hard to imagine how micro amounts of salicylate could be of any therapeutic value. Even with daily doses of sodium salicylate of 1300 milligrams, which are mega amounts beyond the “micronutrients” available in food, we found no evidence of inhibition of platelet function (European Journal of Clinical Pharmacology, vol 27, p 67). This inhibition is essential for prevention and treatment of stroke and heart attack.
Until there is more compelling evidence for the role of natural salicylate (not man-made aspirin) in amounts that are demonstrably effective, it is a long bow indeed that Morgan draws.
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Morgan gives the standard account of the anti-inflammatory properties of aspirin and salicylate through acetylation of the enzymes COX-1 and COX-2. This may conceivably explain the action of aspirin but cannot explain the action of its metabolite, salicylate, which is formed soon after aspirin is absorbed into the body, and which exhibits anti-inflammatory properties of equal strength to those of aspirin. Salicylate has no acetyl grouping and therefore no capacity to acetylate COX-1 and 2.
Frank Cheng of the University of Idaho, has explained the anti-inflammatory activity of salicylate through the chelation of iron to form a metal complex. Iron accumulates in certain areas of the body in some diseases, including rheumatoid arthritis and Parkinson’s disease. Cheng’s research shows that the iron salicylate chelate is less harmful than the uncomplexed metal in that it is not able to generate damaging free radicals. This direct benefit of salicylate may have important implications for people with such diseases.
Flat memory
The article on chips ending Microsoft’s security problems fails to explain what is new (21 February, p 21). How do the new developments differ from the features in the Intel 386 processor with which all current PC processors are backward-compatible? That processor could mark memory segments as executable (that is, as code) and writeable (as data).
Hardware features can only prevent exploitation by hackers if system programmers use the features in their systems. Why do Microsoft’s programmers find trapping buffer overflows such a problem anyway?
While it is true that C/C++ compilers do not automatically generate buffer overflow-checking code, the vast majority of software subroutines that fill buffers do, including those supplied by Microsoft in the Windows Application Programming Interface. Failing to use the feature effectively is just lazy programming, which leads to unreliable programs (and a short, unspectacular career as a programmer).
Anil Ananthaswamy writes:
鈥� While Intel microprocessors do allow memory to be divided into segments and the segments to be tagged as containing either code or data, the microprocessors also allow programmers to dispense with segments entirely. This method of using computer memory is called the flat memory model, and it allows the software to access memory in 4-gigabyte chunks 鈥� also known as pages.
It is here that Intel blundered nearly two decades ago. Its microprocessors did not allow programmers to tag sections of memory within those pages as containing only data or only code. Thus, a page can contain both data and code, and this allows hackers to create viruses and worms by exploiting any buffer overflow errors that programmers have introduced in their software. The new chips from Advanced Micro Devices are correcting this design flaw.
And it is not just Microsoft’s Windows operating systems that use the flat memory model. Unix operating systems, including Linux, also do.